Beneficial ownership

Beneficial ownership is enjoyed by anyone who has the benefits of ownership of a security or property, and yet does not nominally own the asset itself. Webster's defines a beneficial owner as "one who enjoys the benefit of a property of which another is the legal owner."[1]

In US securities law, a beneficial owner (as distinct from a "nominee owner," "registered owner," or "record holder") of a security includes any person who, directly or indirectly, has or shares voting or investment power.[2]

According to the Financial Action Task Force on Money Laundering (FATF), an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering and terrorist financing, the term beneficial owner refers to the natural person(s) who ultimately owns or controls a legal entity and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.

The terms ‘ultimately owns or controls’ and ‘ultimate effective control’ refer to situations in which ownership/control is exercised through a chain of ownership or by means of control other than direct control. The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard.[3]

See also

References

  1. ↑ "Beneficial Owner". Merriam-Webster's Dictionary of Law. Merriam-Webster's Inc. 1996. Retrieved 2010-06-24.
  2. ↑ http://www.law.uc.edu/CCL/34ActRls/rule13d-3.html
  3. ↑ http://www.bvdinfo.com/en-gb/about-us/white-papers/getting-to-grips-with-the-challenge-of-beneficial
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